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Why Did The Daily Die? The View From Inside the Collapse

The Daily is no more, but six former staffers tell Michael Moynihan that the cause of death is more complicated than News Corp. wants you to believe.

As staffers of the scuppered iPad “newspaper” The Daily emptied their desks and inquired about details of their severance packages, News Corp. chairman Rupert Murdoch was in the building, three flights of stairs down, dousing Wall Street Journal deputy editor-in-chief Gerard Baker with champagne. The company had just announced that Baker would assume managing editor duties at the Journal, while current managing editor Robert Thomson was anointed chief executive of the News Corp.’s newly created publishing division.

Photos of the bubbly baptism spread quickly on Twitter, the Journal posted a video of the festivities on its website, and former Daily staffers were not amused. One former senior staffer grumbled to The Daily Beast that such locker-room antics were “a poke in the eye” to those who had just been rendered jobless. Another former Daily senior staffer said that while the Monday announcement provoked more sadness than anger in the newsroom, the champagne stunt demonstrated that Murdoch was “missing a sensitivity chip.” Contrary to published reports, the source said, only two editorial staffers have been retained: editor-in-chief Jesse Angelo, who will become publisher of the New York Post, and gossip columnist Richard Johnson, who is returning to the Post.

Half a dozen former Daily staffers spoke to the Beast about the paper’s brief run, its amorphous editorial identity, and what they believed to be Murdoch’s reasons for pulling the plug. None would speak on the record, most citing terms of their severance agreement and a few withholding hope that other opportunities still exist within News Corp.

While there was a general consensus that News Corp. deserves significant credit for taking a costly chance on an untested market—and requiring readers to pay for content—there was also a grim sense that it wouldn’t last.

“I think everyone is missing the point,” one former senior staffer said. “The way this all happened was, it started with Murdoch saying you’ll have considerable time to make this thing break even or profitable. Remember, Fox News took 10 years to be profitable. And I don’t think the New York Post has ever made a dime for Murdoch.”

Last February, Daily publisher Greg Clayman told the media-news site Poynter.org that the publication had 250,000 monthly readers and 100,000 paid subscribers, numbers “which have absolutely met our expectations.” Clayman urged patience, saying that “it generally takes a new publication an average of five to seven years to break even, and we’re operating well ahead of that curve.” But the Daily’s future changed dramatically after News Corp. was ensnared in the embarrassing and costly phone-hacking scandal last spring—which resulted in the closing of the News of the World, Britain’s largest newspaper and a jewel in the News Corp. crown.

According to the former senior staffer, the Daily’s budget had been “basically approved” when the scandal hit, leading to hundreds of millions of dollars in legal judgments against the company. “Maybe 10 percent lower than the previous year, but nothing drastic. … But then corporate pulls the entire Daily budget back and announces that the company is splitting,” with highly profitable media holdings like Fox Television on one side, and the publishing ventures on another.

After the announcement of the split, a pall hung over the paper. “Now the complete operating budget is half of what it was in 2012,” the former senior staffer said. In an indirect way, it was phone hacking, he claimed, that cost him his job.

Representatives for The Daily did not respond to a request for comment.

“I mean, we started doing puppet news,” one staffer said. “It was pathetic. … We should have been shooting investigative news stories.”

Still, the Daily’s folding this week was unexpected, the former senior staffer said. “The rumbling from within the company is that we would make it to June 2013, the end of the fiscal year,” he said, adding that a decision was made suddenly last week to transfer resources—and Angelo—over to the New York Post.

The precise timing might have been unexpected, but the Daily’s demise was not. There were complaints that it was platform-specific (readers could only get it on the iPad) and that most of its content was sequestered behind a paywall, preventing stories from going viral or being easily shared on Twitter. In a recent conversation with two News Corp. journalists about the paper’s fate, both shrugged that they had given up on the app because it often took multiple minutes to get to the front page. (Largely forgotten in The Daily postmortems is the role of Apple, which initially developed the app with News Corp. and co-hosted the February 2011 launch party at the Guggenheim Museum.)

The Daily’s premature death can reasonably be blamed on all of these factors. But some of the higher-ups believed the world was ready to transition to subscriber-based tablet content, and suggested that any failures could be laid at the feet of those who created The Daily’s content.

Not long before his dramatic demotion following the hacking scandal, James Murdoch, who was then serving as chairman of News Group Newspapers, explained that The Daily would “succeed or fail on the journalism part—not the bells and whistles” of the app. But the paper didn’t suffer from a talent deficit—to the contrary, it benefited from the prodigious talents of Angelo, former Sun online editor Pete Picton, New Yorker writer Sasha Frere-Jones, columnist Reihan Salam, a video team stocked with ABC News veterans, and countless other terrific journalists. Rather it suffered from a wandering focus and inability to find a core audience.

“I think we all came out of worlds that didn’t necessarily overlap,” a former editor said. Some of the talent “left out of frustration,” said another, because they felt isolated from the national conversation and trapped within the digital confines of the tablet. When asked if this was a common complaint within the newsroom, a third former editor confirmed that “whole staff wanted a web presence,” a move that was resisted by higher-ups.

One notable shift that occurred over time was political. Before the launch, a Daily insider told New York Magazine that the goal was not to create “a red-state device.” Initially that vision held, as The Daily charted a centrist course with an often libertarian editorial line as well as an array of liberal voices. But as the paper failed to substantially grow its subscriber base, News Corp tacked towards an editorial formula that has made its conservative-leaning properties so successful. One former editor noted that, over time, the editorial voice shifted towards a “real red-state feeling,” explaining that “coming down from the editors [was a demand] for more red meat.”

Angelo, another former editor explained, “didn’t mind that no one in New York read it, that our readers were based in the middle of America. There was a recognition that our readers were not elites from the Northeast.”

“We did a lot of good journalism sprinkled in,” said a former senior staffer. “But it wasn’t a must-read.” That was largely due, the staffer said, to a schizophrenic editorial personality. “I mean, we started doing puppet news,” the staffer said, recalling a video feature in which puppets anchored a fake newscast. “It was pathetic. You had to pay for those puppets, the puppeteers, and outside writers producing scripts. I get that it’s like the comic page, but what a waste of money! We should have been shooting investigative news stories.”